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Vice president says country is at peace and that dialog is solving problems that led to protests

Vice President Otto Sonnenholzner says that Ecuador is establishing a “lasting peace” and that discussions between the government and indigenous groups are helping to solve problems that led to October’s protests. “It is important to remember, however, that the ongoing dialog is not only with the indigenous but with all sectors of the population.”

Vice President Otto Sonnenholzner

In two recent interviews, Sonnenholzner said that the government is listening to its citizens and developing plans to overcome inequality, to improve services to poor communities, to offer assistance to small agricultural producers and to improve the ability of businesses to increase employment.

“We have learned much from our talks, not just how to improve our relationship with indigenous, who comprise six percent of the population, but with the entire country,” he said. “We are working with the National Assembly on legislation to address unresolved issues as well as developing executive policies to serve the people.”

Sonnenholzner acknowledged that the government made a mistake when it announced the elimination of fuel subsidies that sparked the October protests. “We were not smart in the way we handled this. We did not hold proper discussions with those affected by the decision and this led to unrest.” He added that he still believes ending the subsidies is a legitimate goal. “We will continue to work toward this end but it will be done with consensus reached through dialog.”

The vice president maintains, however, that subsidies were only the “ignition point” of the protests and not the underlying cause. “I have talked to many people, including the indigenous and campesinos, and they tell me that the price of fuel was not their main concern. They are more interested in inadequate services to poor and rural communities, lack of opportunity and government corruption.”

Asked about the absence of the Confederation of Indigenous Nationalities of Ecuador (Conaie) in the current dialog, Sonnenholzner says that the group and its leadership is welcome to join any time and that other indigenous organizations are involved. “We welcome all organizations that represent elements of indigenous populations to the table.”

President Lenin Moreno reached a settlement with Conaie in October that ended the nationwide protests but the group refuses to join the dialog, claiming the government is violating terms of the agreement.

Sonnenholzner maintains that the tax simplification law passed Monday by the National Assembly and budget reform legislation that will be sent to the Assembly on Wednesday are critically important to restoring fiscal order in the country. “Just as addressing issues with the indigenous and poor are important, so are those that affect the economic viability of the country,” he says. “The issues are interrelated since fiscal health leads to greater employment which benefits the entire population.”

He added that Ecuador continues to make progress in reducing poverty and now ranks among the top five Latin American countries for lowest poverty rate. “Extreme poverty, where we have concentrated much of our work, has been reduced from 21.6% to 17.4% in the past three years” he said. “This directly affects more than 230,000 people, including 140,000 children.”

10 thoughts on “Vice president says country is at peace and that dialog is solving problems that led to protests

    1. What exactly did it buy? Besides, if the IMF did not lend the money, where do you suggest Ecuador gets it from? We are borrowing from them because nobody else wants to pour money into Ecuador, at least not at reasonable rates and under the existing laws.
      People keep lashing out at the Fund but again, Ecuador was a founding member back in 1945 (with the vote of the Socialist Revolutionary Movement of the time) and no president of any political color has opted out since then.

      1. One of the favorite lies is that Ecuador needs the IMF. We have a very low debt to GDP ratio and don’t need these loans. So the question that begs an answer is:Why is Moreno doing this?

        1. No, as a matter of fact, the GDP ratio is not low at all. The government needs to finance more than 6 billion for next year. As you think otherwise, please provide your figures.

          1. Karl, what is the ratio? You speak as if borrowing money to pay future debt is a good idea. I know of no economists that recommend that, unless they work for IMF or World Bank. What, in your opinion, is the debt that needs to be paid off? When that debt was made what are the concrete facts and contingencies for paying it off without borrowing more money? No one in their right mind makes debt without some concrete plan of paying it off! Whomever it was that made that loan or debt should be told to restructure it for a later date whereby the country can repay it without putting additional burdens on the taxpayers.
            You might benefit, if you are open minded, from reading a book titled “the new confessions of an economic hit man.”
            This country is too precious to fall victim to a group of international flim flam people.

          2. Karl, if you want a good laugh, check out the GDP ratio of the USA. By the IMF regulations it would be in dire straits and ordered to go on austerity pronto..but since they own the printing presses that’s not happening.

            1. …well, as you correctly point out, the US got ways and means to finance its deficit (one is the printing press, another foreign countries buying its treasury bonds), Ecuador doesn´t. In fact, it does not have ANYBODY wanting to finance its fiscal holes (you tell me why that is), that is why it has turned to the IMF.

              1. Those foreign countries buying treasury bonds is a business that has slowed considerably lately. Hmm, why is that? And Ecuador most certainly has willing partners but Moreno only has eyes for one girl and she has a fat pocketbook and a bad reputation.

                1. Who are the willing partners? What are their conditions?

                  The IMF loans, which come at a rate of around 3% p.a. over 10 years, are conditioned on structural changes which the country badly needs but which, for the last 20 years, nobody has been willing to face, governments and people alike. It is worth noting that nobody´s talking about the other multilaterals contributing more than 6 billion to the total (World Bank, BID, CAF, others). There is no “collateral” to these loans as some suggest. But, in the interest of its 190 member countries, the Fund as well as the other lenders must make sure that the borrower implements measures to be able to pay it back. You would ask the same of me if you lent me and have every right to do so but again, Ecuador and every other country approaching the Fund should never have manoevered itself into the position it is in now. Unfortunately, Ecuador is not alone in this, even “developed” countries rack up debt at breath-taking speed and some future generation will have to pay up, be it to “willing partners” or else.

                  And as for treasury bonds, they keep on finding willing buyers even at, from an investor´s point of view, ridiculously low interest rates (the markets demand 8%+ from Ecuador, it´s a risky place from every angle, holders of the bonds on which the country defaulted in 1999 and 2008 will painfully remember). If it has slowed, as you suggest, it may have to do with the widening spread between that kind of asset and available alternatives. If a government bond pays you 1% you´re probably better off taking that money to the stock market. That´s one of the reasons why the markets seem to have no ceiling these days, for good or bad.

      2. Karl, you asked what it bought. With a 45.2% ratio of government debt to gdp whatever the government agreed to provide as collateral for the loans is what has been bought. It will be forfeited when Ecuador can no longer pay back according to the terms.
        By accepting the IMF loans at whatever (being kept secret) price they come with along with their guarantees it is paramount to selling off Ecuador and its’ resources. Surely you can see the direction this is going. IMF loans the government money, government debt-to-gdp increases. (true or false?) The inability to repay increases proportionately to the increase of the ratio! Why is this bad? Because we will lose everything we posted as guarantees to paying back a loan on past debt!
        The only way we can heal our country is to cut government spending and take those cuts and pay down the existing debt. But, to do that will require the government to find GOD in their accounting procedures. Clean up their kleptocracy! Make some heads roll and put a stop to the blood letting occurring in Quito by the politicians.
        This is a crazy idea!
        Simply put…. I owe you 100 each month. I am having trouble paying the 100 so I borrow more to pay the 100 and now I must find additional money to pay back the original 100 plus the new borrowed money and interest. ???????
        If we are serious we will run as fast as we can from the IMF back to our creditors and renegotiate pay offs. Only way Ecuador will ever be anything other than a poor loser nation in the economies eyes.
        Take a look at where we are at today! The VP is lying about the numbers. The December 2019 results are out and not even close to what he is quoting!

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